It is reported that the Ethiopian Petroleum Enterprise is in negotiations with the Sudanese Petroleum Corporation to import petroleum coke a by product of heavy crude oil to power small sized cement factories.
This follows a collective complaint lodged by managers of six cement factories to officials at the Ministry of Industry that they cannot power their plants with steam coal in the process of import from South Africa. The Enterprise has awarded Huypon Inc a foreign trading house represented by Mr PG Phillipas for the supply of up to 45,000 tonnes of coal worth USD 6.5 million.
The company has been awarded the contract after bidding against HMS Bergbau AG, a German based coal trading company, established in 1995 and Wibyan, an Indonesian company.
Managers at Jemma Cement, Debre Sina Cement, CH Clinker, Abyssinia Cement, Huang Shan Cement and Enchini Medrock Cement, with a combined annual production capacity of 990,600tn, want to see the Enterprise import anthracite coal, a high quality coal used to power furnaces of cement factories with vertical kilns.
However, it will take time for the Enterprise to administer the procurement process for the importation of anthracite coal. Thus, these factories should continue production using pet coke. Their consumption of this commodity is estimated at 20,000 tonnes each, according to surveys by the EPE.
Pet coke was the first choice of the government when it first planned to shift factories’ use from heavy furnace oil, aiming at reducing foreign currency, to a cheaper source of power. However, the plan failed, as the pet coke producers that the Enterprise had approached, including SPC, Kuwait Petroleum Corporation and Mombassa Refinery, did not have sufficient pet coke in stock.
Mr Abayneh Awel, head of petroleum import and export supply at the Enterprise, confirmed to Fortune that "It was because the demand was high, as it was for all factories."
The Enterprise, following recommendations from authorities at the federal government, had placed an order for the import of one million tonnes of pet coke, lower, almost by half, from the projected demand from all cement factories for the next four years, data compiled by the Enterprise reveals.
SPC, which has a monthly production capacity of around 25 tonnes of pet coke, is currently the supplier to most of the cement factories in the country. It charges cement factories in Sudan USD 92 for the freight on board price and USD 140 for the cost, insurance, and freight price.
The price of a tonne of pet coke, which has around 89% carbon content, stood at USD 151 in January 2012. A tonne of anthracite coal, which has 98% carbon content, was at USD 205 in the international market.
To date, nine factories, including Messobo, National, Jemma, Huang Shan, Debre Sina, Dejen Project, Zongshan Cement, Hua Yi Cement, and Pioneer Cement, use pet coke as a source of energy, according to data of the MoI. National, Messobo, and Derba MIDROC cement plants are the factories with a horizontal kiln suitable for the use of steam coal.
The factories have now been told to ready eight trucks each, for the transportation of steam coal from port in Djibouti.
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